EX-99 2 0002.txt THIRD QUARTER EARNINGS RELEASE EXHIBIT 99 NEWS RELEASE ------------- FOR IMMEDIATE RELEASE Contact: John W. Conlon, Chief Financial Officer --------------------- (740) 373-3155 October 23, 2000 PEOPLES BANCORP REPORTS 11% INCREASE IN THIRD QUARTER EARNINGS PER SHARE ---------------------------------------------------------------------------- MARIETTA, Ohio - Peoples Bancorp Inc. (Nasdaq: PEBO) announced third quarter earnings of $0.44 per diluted share, up 10.8% over the third quarter of 1999, as growth in non-interest revenues contributed to increased earnings. Net income for the quarter ended September 30, 2000, totaled $2,882,000, up $124,000 (or 4.5%) from the same period last year. Return on average assets and return on average equity were 1.04% and 15.33%, respectively, for the third quarter of 2000 compared to 1.07% and 14.37%, respectively, for the third quarter of 1999. Earnings for the third quarter of 2000 include pre-tax gains on sales of securities and assets of $102,000, which increased earnings per share by $0.01. Cash basis earnings increased to $0.50 per diluted share in the third quarter of 2000, up $0.04 (or 8.7%) compared to the third quarter of 1999, and for the nine months ended September 30, 2000, totaled $1.46 per diluted share, an increase of $0.11 (or 8.1%) over the same period last year. Cash basis return on average equity was 23.25% for the third quarter of 2000 compared to 22.84% a year earlier and 23.03% for the first nine months of 2000 versus 20.04% in 1999. Cash basis earnings exclude the effects of intangible assets and related amortization expenses. Year-to-date through September 30, 2000, net income totaled $8,444,000, or $1.28 per diluted share, a $507,000 (6.4%), or $0.15 per diluted share (13.3%), increase from 1999's total of $7,937,000, or $1.13 per diluted share. Return on average equity was 15.38% for the first nine months of 2000 versus 12.74% a year ago. For the nine months ended September 30, return on average assets was 1.04% versus 1.10% a year ago. "We are pleased to announce solid third quarter results," commented Robert E. Evans, Peoples Bancorp's President and CEO. "Our investment and insurance sales efforts continue to produce strong revenue growth. One of our goals is to grow revenues 20% annually while fulfilling our clients' needs by providing diversified, integrated financial products and services." Since 1999, Peoples Bancorp ("Peoples") has continued to implement its "Connections" process to enhance client service through integrated, relationship-based selling. Promotional campaigns to increase core deposits and enhance Peoples' product and service visibility in its primary markets have been recent focal points of these marketing initiatives. Peoples deposit growth of nearly $26 million in the third quarter of 2000 can be attributed to the Connections process, which also provides Peoples with increased fee income opportunities with new clients and referral opportunities to Peoples' many investment and insurance products. Peoples' commitment to diversity and growth of revenues through various lines of business, especially those not dependent on interest rates, resulted in strong growth of non-interest income (excluding securities gains) in the third quarter of 2000 as revenues increased $430,000 (or 22.7%) to $2,327,000 compared to 1999's third quarter. For the nine months ended September 30, 2000, non-interest income totaled $6,688,000, an increase of $1,132,000 (or 20.4%) compared to the same period in 1999. Service charges on deposits, still Peoples' largest source of non-interest revenues, grew $145,000 (or 21.0%) in the third quarter of 2000 compared to the same period a year earlier. Revenue growth can be attributed to volume increases of standard cost-recovery fees related to overdraft and non-sufficient funds, as well as volume growth in Peoples' deposit service income generated from business customers. Insurance commission revenues increased from $130,000 in the third quarter of 1999 to $415,000 for the three months ended September 30, 2000. The majority of revenue growth resulted from increases in Peoples' life insurance and annuity sales. Commission revenues from sales of property and casualty insurance also grew significantly in the third quarter of 2000 as Peoples Insurance client service teams continue to expand the number of clients served. Growth of investment and insurance commissions was partially offset by decreased trust revenues in the third quarter of 2000 compared to the same period a year ago. Trust revenues have been challenged in 2000 due to recent decreases in market valuations. Despite those challenges, on a year-to-date basis, trust revenues are up $14,000 (or 0.7%) compared to the nine months ended September 30, 1999. Electronic banking revenues increased $47,000 (or 19.0%) to $294,000 in the third quarter of 2000, due primarily to increased debit card activity and expanded use of debit cards by Peoples' clients. Management believes growth in non-interest income reflects the success of Peoples' client service teams to professionally and quickly serve client needs. Fueled by continued insurance and investment revenue growth, management expects non-interest income to grow modestly in the latter part of 2000 and into the first quarter of 2001. Compared to the same period a year earlier, net interest income on a fully tax equivalent basis decreased $173,000 (or 1.7%) to $10,250,000 for the quarter ended September 30, 2000, resulting in a net interest margin of 3.99%. Through the first nine months of 2000, net interest margin was 4.14% versus 4.41% in 1999. Net interest margin faced downward pressure due to competitive pricing of loans and deposits in Peoples' markets, as well as rising interest rates on Peoples' interest-bearing liabilities, particularly Peoples' short-term borrowings, which have repriced upward approximately 160 basis points since the third quarter of 1999. Peoples' reliance on short-term funding has increased due to recent loan growth and repayments of certain longer-term borrowings. Management anticipates that Peoples' net interest income levels will remain stable compared to the third quarter of 2000 or decrease modestly due to competition for loans and deposits in Peoples' primary markets. Management recently increased Peoples' base retail loan rates to reflect current interest rate conditions, although any enhancements in net interest margin from this increase is expected to be offset by increases in funding source costs. Net interest margin in 2000 has also been impacted by Peoples' asset growth strategy implemented in mid-1999, as Peoples increased its earning asset base by approximately $150 million in conjunction with the trust preferred securities issued in April 1999. Peoples' strong loan growth continued in the third quarter of 2000, increasing $22.9 million (or 3.3%) since June 30, 2000 to $724.3 million at the end of the third quarter of 2000. Most of Peoples' loan growth has occurred in its mid-Ohio Valley markets and contiguous areas, as well as central Ohio markets in Fairfield and Licking Counties. Volume increases occurred in commercial loans and real estate loans, including home equity loans, which continue to be a popular loan product for many Peoples' clients. Management expects modest loan growth in the fourth quarter of 2000. As a result of the increase in loan volume, the loan loss provision increased $153,000 during the third quarter of 2000 compared to the same period a year earlier. At September 30, 2000, Peoples' allowance for loan losses totaled $11.2 million (or 1.55% of total loans), up $942,000 since year-end 1999. Peoples' asset quality continues to be above peer group levels and reflects the overall quality of Peoples' loan portfolio. Peoples continued its investment in enhanced client service initiatives in the third quarter of 2000, which contributed to increased non-interest expense. In the third quarter of 2000, non-interest expense totaled $7,750,000, an increase of $434,000 (or 5.9%) compared to the same period last year. Salaries and benefits expense is Peoples' largest non-interest expense, and increased $412,000 (or 13.8%) compared to the third quarter of 1999, due primarily to commissions paid to insurance and investment associates as well as modest increases in the number of Peoples' client service associates. Occupancy and equipment expenses were up $95,000 (or 10.9%) from the third quarter of 1999 due to investments in technology and client service areas designed to enhance Peoples' associates ability to serve client needs. One of Peoples strategies is to make financial services more convenient, flexible, and speedy for clients, including Internet banking and other means of electronic banking. Management believes current investments in and expansion of client service efforts helps Peoples accomplish that goal. The increased level of non-interest expense is reflected in Peoples Bancorp's efficiency ratio. For the quarter ended September 30, 2000, the efficiency ratio was 56.80% compared to 54.03% a year ago, while on a year-to-date basis, was 56.60% in 2000 versus 53.61% in 1999. The combination of compressed net interest margins and increased levels of non-interest expense have negatively impacted Peoples' efficiency ratio, while favorably impacting other ratios such as return on shareholders' equity and earnings per share. Peoples' effective tax rate was 29.3% in the third quarter of 2000 compared to 32.5% for the third quarter of 1999. For the nine months ended September 30, the effective tax rate was 30.2% compared to 31.9% in 1999. Peoples has implemented tax reduction strategies, including investing in low income housing and historic tax credits, in an effort to reduce tax burden and lower the effective tax rate reflected in the third quarter of 2000 and going forward. Management continues to explore methods in which to decrease Peoples' tax burden. Peoples continues to repurchase treasury shares through its 2000 Stock Repurchase Program, although such purchases have slowed in recent weeks as management analyzes other cash considerations for optimum return to shareholders. At October 20, 2000, Peoples had repurchased approximately 56% of the 165,000 shares authorized under the 2000 Stock Repurchase Program. Peoples Bancorp Inc. is a diversified financial services company with $1.1 billion in assets. Peoples' lead subsidiary is Peoples Bank, National Association, which offers complete banking products and services through 38 financial service locations and 25 ATM's in Ohio, West Virginia, and Kentucky. Peoples Bank also makes available other financial services through Peoples Investments, which provides customer-tailored solutions for fiduciary needs, investment alternatives, and asset management needs (securities are offered exclusively through Raymond James Financial Services, member NASD/SIPC, an independent broker/dealer located at Peoples Bank). Peoples Insurance also provides life, property and casualty insurance products and services through Peoples Insurance Agency, Inc. Peoples Bancorp's common shares are traded through the Nasdaq National Market System under the symbol PEBO. Learn more about Peoples Bancorp or enroll in Peoples OnLine Connection, Peoples Bank's Internet banking product, at www.peoplesbancorp.com. The statements in this release which are not historical fact are forward looking statements that involve risks and uncertainties, including, but not limited to, the interest rate environment, the effect of federal and state banking and tax regulations, the effect of technological changes, the effect of economic conditions, the impact of competitive products and pricing, and other risks detailed in Peoples' Securities and Exchange Commission filings. Although management believes that the expectations in these forward-looking statements are based on reasonable assumptions within the bounds of management's knowledge of Peoples' business and operations, it is possible that actual results may differ materially from these projections. PEOPLES BANCORP INC. (Nasdaq: PEBO) Financial Highlights (Unaudited)
-------------------------------- -------------------------------- Three Months Ended Nine Months Ended (in $000's, except share data) September 30, September 30, 2000 1999 2000 1999 -------------------------------- -------------------------------- PER SHARE DATA Net income per share (a) Basic $ 0.44 $ 0.41 $ 1.29 $ 1.15 Diluted $ 0.44 $ 0.40 $ 1.28 $ 1.13 Cash basis earnings - diluted (b) $ 0.50 $ 0.46 $ 1.46 $ 1.35 Dividends declared per share $ 0.14 $ 0.13 $ 0.42 $ .37 Book value per share $ 11.86 $ 11.24 $ 11.86 $ 11.24 Tangible book value per share (b) $ 9.03 $ 8.23 $ 9.03 $ 8.23 Dividend payout as a percentage of net income 31.78% 31.18% 32.73% 32.28% Actual shares outstanding (net of treasury shares) (a) 6,496,726 6,688,156 6,496,726 6,688,156 Weighted average shares outstanding: Basic 6,518,187 6,763,341 6,532,434 6,872,698 Diluted 6,583,143 6,977,334 6,616,546 7,056,986 PERFORMANCE RATIOS Return on average equity 15.33% 14.37% 15.38% 12.74% Cash basis return on average equity (b) 23.25% 22.84% 23.03% 20.04% Return on average assets 1.04% 1.07% 1.04% 1.10% Cash basis return on average assets (b) 1.21% 1.27% 1.21% 1.32% Efficiency ratio (c) 56.80% 54.03% 56.60% 53.61% Net interest margin (fully tax equivalent) 3.99% 4.38% 4.14% 4.41% Net loan chargeoffs as a percentage of average loans 0.04% 0.03% 0.11% 0.09% NET CHARGEOFFS Gross chargeoffs $ 422 $ 274 $ 1,063 $ 848 Recoveries $ 115 $ 99 $ 283 $ 300 -------------- -------------- --------------- -------------- Net chargeoffs $ 307 $ 175 $ 780 $ 548 -------------- -------------- --------------- -------------- (a) Adjusted for stock dividends. (b) Excludes after-tax impact of intangible amortization expense and/or balance sheet impact of intangible assets acquired through use of purchase accounting for acquisitions. (c) Non-interest expense (less intangible amortization and non-direct operational expenses) as a percentage of fully tax equivalent net interest income plus non-interest income. All non-recurring items are removed from the calculation.
PEOPLES BANCORP INC. CONSOLIDATED STATEMENTS OF INCOME
-------------------------------- -------------------------------- Three Months Ended Nine Months Ended (in $000's) September 30, September 30, 2000 1999 2000 1999 -- ----------- ------------- -------------- -------------- Interest income $ 21,799 $ 19,104 $ 62,835 $ 52,711 Interest expense 11,804 9,049 32,511 24,453 -- ----------- -- ----------- -- ----------- -- ----------- Net interest income 9,995 10,055 30,324 28,258 Provision for loan losses 600 447 1,722 1,431 -- ----------- -- ----------- -- ----------- -- ----------- Net interest income after provision for loan losses 9,395 9,608 28,602 26,827 Net gain (loss) on securities transactions 66 (115) 10 (114) Net gain (loss) on asset disposals 36 14 (109) 9 Non-interest income: Service charges on deposits 835 690 2,380 1,993 Trust revenues 648 681 1,974 1,960 Insurance commissions 415 130 945 378 Electronic banking revenues 294 247 886 741 Other non-interest income 135 149 503 484 -- ----------- -- ----------- -- ----------- -- ----------- Total non-interest income 2,327 1,897 6,688 5,556 Non-interest expense: Salaries and benefits 3,393 2,981 9,987 8,762 Occupancy and equipment 963 868 2,957 2,697 Trust preferred 656 663 1,961 1,180 Amortization of intangibles 571 657 1,713 1,970 Other non-interest expense 2,167 2,147 6,479 6,017 -- ----------- -- ----------- -- ----------- -- ----------- Total non-interest expense 7,750 7,316 23,097 20,626 -- ----------- -- ----------- -- ----------- -- ----------- Income before income taxes 4,074 4,088 12,094 11,652 Income taxes 1,192 1,330 3,650 3,715 -- ----------- -- ----------- -- ----------- -- ----------- Net income $ 2,882 $ 2,758 $ 8,444 $ 7,937 -- ----------- -- ----------- -- ----------- -- ----------- Fully tax equivalent net interest income $ 10,250 $ 10,423 $ 31,095 $ 29,265
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION ---------------------------------- --------------------------------- Three Months Ended Nine Months Ended (in $000's) September 30, September 30, 2000 1999 2000 1999 ---------------------------------- --------------------------------- CONSOLIDATED AVERAGE BALANCES Average gross loans $ 711,194 $ 613,306 $ 686,988 $ 590,673 Average earning assets 1,003,321 933,252 976,061 873,661 Average total assets 1,104,197 1,031,184 1,079,868 960,570 Average non-interest bearing deposits 80,283 78,665 81,054 77,487 Average interest bearing deposits: Savings 81,109 95,434 85,555 97,383 Interest-bearing demand deposits 241,879 217,405 228,041 212,028 Time deposits 336,624 309,905 340,388 317,041 --------------- --------------- --------------- --------------- Total average interest bearing deposits 659,612 622,744 653,984 626,452 Average stockholders' equity $ 75,187 $ 76,764 $ 72,875 $ 83,046 --------------- --------------- --------------- ---------------
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION ----------------- ----------------- ----------------- September 30, December 31, September 30, 2000 1999 1999 ----------------- ----------------- ----------------- LOAN PORTFOLIO (in $000's, end of period) Commercial, financial, and agricultural $ 290,308 $ 272,219 $ 254,486 Real estate, construction 27,344 14,067 12,135 Real estate, mortgage 280,206 252,427 246,191 Consumer 126,470 121,120 118,328 ----------------- ----------------- ----------------- Total loans $ 724,328 $ 659,833 $ 631,140 ASSET QUALITY Allowance for loan losses as a percent of total loans 1.55% 1.56% 1.65% Allowance for loan losses as a percent of nonperforming loans (a) 320.1% 487.6% 540.1% Nonperforming loans as a percent of total loans (a) 0.48% 0.32% 0.30% Nonperforming assets as a percent of total assets (b) 0.34% 0.21% 0.22% Nonperforming assets as a percent of total loans and other real estate owned real estate owned (b) 0.52% 0.35% 0.36% Nonperforming assets (in $000's, end of period): Loans 90 days or more past due $ 610 $ 249 $ 702 Renegotiated loans $ 945 $ 747 $ 748 Nonaccrual loans $ 1,946 $ 1,109 $ 474 Other real estate owned $ 283 $ 207 $ 349 ----------------- ----------------- ----------------- Total nonperforming assets $ 3,501 $ 2,312 $ 2,273 REGUALTORY CAPITAL (in $000's, end of period) Tier 1 risk-based capital 12.58% 12.57% 13.15% Total risk-based capital ratio (Tier 1 and Tier 2) 14.03% 14.30% 14.86% Leverage ratio 8.54% 8.29% 8.58% Tier 1 capital $ 94,247 $ 87,216 $ 87,795 Total capital (Tier 1 and Tier 2) $ 105,097 $ 99,213 $ 99,222 Total risk-weighted assets $ 749,331 $ 693,688 $ 667,591 SUPPLEMENTAL DATA (in $000's, end of period) Trust assets under management $ 508,396 $ 560,229 $ 572,091 One year cumulative repricing gap $ (49,345) $ (63,033) $ (28,192) Employees (full-time equivalent) 383 385 377 Full service offices 32 31 31 Supermarket offices 4 3 3 ATMs 25 24 23 Announced treasury share plans: (c) Total shares in plan 165,000 346,500 346,500 Shares purchased (d) 16,670 89,977 169,154 Average price (d) $ 14.75 $ 23.46 $ 25.57 ----------------- ----------------- ----------------- (a) Nonperforming loans include loans 90 days past due and accruing, renegotiated loans, and nonaccrual loans. (b) Nonperforming assets include nonperforming loans, and other real estate owned. (c) 1999 data reflects 1999 Stock Repurchase Program of 346,5000 shares (or 5% of outstanding shares); 2000 data reflects 2000 Stock Repurchase Program of 165,000 shares (or 2.5% of outstanding shares). All share amounts adjusted for stock dividends. (d) Reflects treasury shares purchased and average price paid for the three month period ended on the date indicated.
PEOPLES BANCORP INC. CONSOLIDATED BALANCE SHEETS ------------------ ------------------ (in $000's) September 30, December 31, 2000 1999 ------------------ ------------------ ASSETS Cash and cash equivalents $ 26,062 $ 43,751 Available-for-sale investment securities, at estimated fair value (amortized cost of $340,865 and $340,082 at September 30, 2000 and December 31, 1999, respectively) 329,421 328,306 Loans, net of unearned interest 724,328 659,833 Allowance for loan losses (11,206) (10,264) -- --------------- --- -------------- Net loans 713,122 649,569 Bank premises and equipment, net of accumulated depreciation 15,776 15,321 Goodwill 16,133 17,428 Other intangibles 2,291 2,726 Other real estate owned 283 207 Other assets 19,517 18,142 -- --------------- --- -------------- TOTAL ASSETS $ 1,122,605 $ 1,075,450 -- --------------- --- -------------- LIABILITIES Non-interest bearing deposits $ 80,749 $ 83,267 Interest bearing deposits 673,926 644,940 -- --------------- --- -------------- Total deposits 754,675 728,207 Federal funds purchased, securities sold under repurchase agreements, and other short term borrowings 115,131 87,439 Long-term borrowings 138,518 150,338 Accrued expenses and other liabilities 8,205 7,606 -- --------------- --- -------------- TOTAL LIABILITIES 1,016,529 973,590 Guaranteed preferred beneficial interests in junior subordinated debentures 29,012 28,986 STOCKHOLDERS' EQUITY Common stock, no par value (12,000,000 shares authorized, 6,672,875 shares issued at September 30, 2000, and 6,387,509 shares issued at December 31, 1999) 66,279 65,043 Accumulated comprehensive income, net of deferred income taxes (7,439) (7,654) Retained earnings 21,614 26,241 Treasury stock, at cost (176,149 shares at September 30, 2000 and 398,662 shares at December 31, 1999) (3,390) (10,756) -- --------------- --- -------------- TOTAL STOCKHOLDERS' EQUITY 77,064 72,874 -- --------------- --- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,122,605 $ 1,075,450 ------------------ ------------------